Tech Data Points: Waterloo vs. Silicon Valley

The hard facts matter.

When site selectors are tasked with finding the best location for a company’s new office, their primary objective is to minimize risk by eliminating any communities that simply don’t work. The fastest way to eliminate contenders is through comparative data – the numbers that objectively identify a community’s strengths and weaknesses.

The numbers don’t lie.

Every company might weigh these numbers differently, but issues like workforce, salaries, taxes, quality-of-life and relevant post-secondary programs are core to every expansion decision in the tech industry.

Our new Technology Data Book offers comparative third-party data covering each of these categories. Our goal is to provide you with apples-to-apples comparisons for eleven major tech ecosystems in North America. You can download it now.

What does this data look like? We’re giving you a taste below with a comparison between Waterloo region and Silicon Valley. What happens when you use data to compare Canada’s most dynamic tech ecosystem with the behemoth that is Silicon Valley? Find out.

Data Point #1: Tech Workforce Size and Growth

Source: CBRE Scoring Tech Talent Report 2024

Well, this seems like a bit of a wipe-out for Waterloo. Maybe a bit unsurprising since we’re talking about a mid-size community versus THE global tech powerhouse. But there’s more to the story. Yes, Silicon Valley has way more tech workers – in places like San Francisco, San Jose, Palo Alto, etc. – but it doesn’t have another giant tech talent market on its doorstep.

Waterloo does.

Toronto, North America’s 4^th largest city, has 314,100 tech workers and is just one hour away from Waterloo. That takes the total tech workforce to a respectable 343,200 for the comparable Toronto-Waterloo Corridor geography. Oh, and Toronto has grown 44% over the last five years. The Toronto-Waterloo Corridor is catching up – fast.

Data Point #2: Population Growth

Source: Lightcast, 2023. Population growth from 2017-2022 at the CD/MSA level; CBRE Scoring Tech Talent Report 2024

Yes, Silicon Valley is bigger in terms of population, but it’s heading in the wrong direction!

Waterloo’s strong population growth – the fastest-growing in Canada, in fact – is a big positive, but it’s our growth rate in the millennial and Gen-Z demographics that’s a real eye-opener. Waterloo has the top growth rate in these two demographics among all 50 communities included in the 2024 CBRE Scoring Tech Talent Report.

People of working age are moving to the Waterloo area in droves, even as they leave Silicon Valley in significant numbers.

Data Point #3: Estimated One-Year Company Cost

Source: CBRE Scoring Tech Talent Report 2024 – based on office space and wages for 500 people

Woah now. That’s a big difference.

An office in Silicon Valley will cost double what you’d pay in Waterloo. The exact same office. The same number of employees, working in the same roles, in the same amount of office space.

CBRE calculates this using real estate and salaries, but Canada’s tax advantages add even more to the difference. If you’re a scaling company looking to gain capacity without breaking the bank, Waterloo is going to give you a lot more runway – better bang for your buck.

Data Point #4: Payroll Taxes

Source: Salaries from Economic Research Institute, Q3 2024. Taxes from respective governments.

You might need to do a double take on this one. Maybe even a triple take.

Yes, you read that right – in Silicon Valley, your company will pay triple the payroll tax per software engineer that you’d pay in Waterloo. That’s nearly $10,000 per employee.

What’s happening here? Well, it starts with salaries in Silicon Valley being about double – that doesn’t help. But, if everything else was equal, the payroll taxes in Silicon Valley are still almost 35% higher than in Waterloo.

For example, a hypothetical employee earning $75,000 in Silicon Valley would require businesses to pay $6,017.50 per year for things like unemployment insurance, medicare and social security, while an employee earning the same salary in the Waterloo area would cost just $4,258.72 per year.

Canada has a reputation of being a high-tax jurisdiction, but when it comes to business, it’s just not true. Our payroll taxes are lower than anywhere in the United States.

Data Point #5: Average Monthly Apartment Rent

Source: Zumper.com, March 2024

For anyone living in Silicon Valley, this data point can’t come as a surprise. California has the second highest average rent in the United States and the Bay Area is the home to some of North America’s most expensive neighbourhoods.

Waterloo isn’t exactly cheap, but in comparison, it’s affordable. If your company is concerned about employees having a great quality of life, well, it all starts with being able to afford the roof over your head. In Waterloo, that roof is more attainable.

In the end, there’s a reason why Google established its Canadian Engineering Headquarters in our community. It’s the same reason companies like Carta, Enlighted, MasterClass, DialPad, Cisco, Turntide Technologies, McAfee and Block are growing here. It comes down to talent, cost, quality-of-life and, harder to measure, our collaborative culture. If you want to know more about Waterloo – or you want to explore expansion – check out our services and contact pages.